An encouraging year

February 2003

The statistics were not yet published, and the numbers for the deciding period of the 4th quarter of last year were not yet completely known, yet French watchmakers were smiling a little at the end of January. The first signs of 2003 were encouraging. They indicated that exports would be up slightly.

French watchmaking thus seems to be pulling out of a touchy situation caused by the current unfavourable economic times marked by a slowdown in the market since the attacks of 9/11, the general morose environment, the oil crisis and the uncertainty of the Iraq situation. It has also harvested the fruits of a particularly successful Basel 2002. As we mentioned in this column at that time, French brands have made a name for themselves thanks to their creativity as well as the quality of their timepieces.

Led by the trio of Herbelin, Péquignet and Saint-Honoré, the French timepiece has moved upmarket over the last few years and today proposes original and quality products that set themselves apart in a market where many brands end up looking like each other. The continuous innovation of Pierre Lannier has also been rewarded, if the first signs are an indication.

The numbers say it all – the independent brands still have a card or two to play in a watch market where the merger mania of the 1990s seemed to put the brakes on creativity. The French parts makers that rely on independent brands did well in 2002, according to the French watchmaking organizations. On the other hand, those component parts manufacturers that work for the large groups had a difficult year. We need not remind anyone that these same groups enjoyed spectacular years before the slowdown.

The situation in the Middle East, along with the Iraqi crisis, does not bode well for this beginning of the year. This important market for watches is blocked for now. Since economists are not predicting an immediate recovery, the first half of the year may well be difficult for many French brands.

On the other hand, these companies are happy with the decision by Jean-Pierre Raffarin's government to liberalize the application of France's 35-hour work week. Introduced under the socialist regime of Lionel Jospin, this shortened work week causes many a headache for small French watchmaking enterprises, which have to juggle their personnel in order to produce the watches on time. Some directors of companies even state that Switzerland, in spite of its higher salaries, has become more competitive under the current 35-hour work week. When this law went into effect, it upset the fragile equilibrium in the watchmaking region of the Jura mountains on both sides of the border. Hopefully everything should stabilize this year under the new government's policies.

Another reason for happiness among French watchmakers is that an Alain Silberstein watch sold for 125,000 Euros at a recent Antiquorum auction in Geneva, that was organized under the theme 'Evolution of forms in watchmaking'. The watchmaker from Besançon beat his previous record that was established in New York in May. One of his other watches sold for 99,000 Euros. These sales prices prove to those who may still have doubts… the French watch is no longer what you thought it was.